Private equity firm Carlyle Group LLC, in partnership with the Qatar Investment Authority (QIA), has entered into a binding agreement to acquire BASF’s coatings business for an enterprise value of €7.7 billion, the companies said in a joint statement Oct. 10. BASF will retain a 40% stake in the business, which will keep the name BASF Coatings.
The acquisition includes BASF’s automotive OEM coatings, automotive refinish coatings and surface treatment activities.
Reports emerged earlier this week that Carlyle would buy the BASF coatings business.
Subject to customary regulatory approvals, the transaction is expected to close in the second quarter of 2026. The deal, together with the already closed divestiture of BASF’s decorative paints business, values BASF’s entire coatings division at an enterprise value of €8.7 billion and an implied 2024 enterprise value/EBITDA multiple before special items of approximately 13x.
The deal represents “a significant step in unlocking the value of BASF’s standalone businesses, as the company swiftly executes its Winning Ways strategy,” the statement said. BASF will also reinvest in the coatings business, through its remaining 40% stake, and receive pretax cash proceeds of about €5.8 billion at closing of the transaction, it said.
BASF Coatings is a global player in the development, production and marketing of automotive OEM and refinish coatings as well as applied surface treatments for metal, plastic and glass substrates in a range of industries, the statement said. The business operates in Europe, North America, South America and Asia-Pacific, and generated sales of approximately €3.8 billion in 2024. Automotive OEM coatings accounted for €2 billion of sales; surface treatment under the Chemetall brand accounted for €1 billion of revenue; and refinishes, including the Glasurit brand, accounted for €800 million of sales, BASF said.
Carlyle, working with the business’s management, will support the future growth of the business through investing in its commercial capabilities, innovation pipeline and organizational structure to enhance customer focus, the statement said. Carlyle has a “strong track record and extensive experience in successful carve-outs of industrial and chemical assets,” following previous investments in Axalta Coatings Systems, Atotech and H.C. Starck, and current investments in Nobian, Nouryon and Novolex, it said.
Carlyle’s “expertise, carve-out capabilities and collaborative approach will help position BASF Coatings for long-term success,” said Markus Kamieth, BASF chairman, in the statement. “By retaining an equity stake, we are showing our belief in coatings’ future value-creation and upside potential.”
In a call with analysts Oct. 10 to discuss the deal, Kamieth declined to say for how long BASF would keep the 40% stake and added that there is no contractual minimum timeline for divesting the stake.
“Of course, the idea is that at one point in time, and as normally with an investment fund or a private equity company, there is going to be an exit,” he said. “And our ongoing hypothesis is that we will also jointly be working on this exit at one point in time. We and our partner [Carlyle] are clearly aligned on the value-creation plan and also on potentially creating the conditions for a joint exit.”
The deal “opens a new chapter of opportunity” for the BASF coatings business, said Anup Kothari, board member/coatings at BASF.
BASF Coatings has leading technologies, strong customer partnerships and a global footprint, said Martin Sumner, global head of industrials, and Tanaka Maswoswe, partner at Carlyle, in the statement. “We see compelling opportunities to leverage our global platform to support the business becoming an established independent leader,” they said.
The investment aligns with QIA’s approach of “investing in industry leaders and is testament to our belief in the long-term resilience of German businesses,” said Mohammed al-Sowaidi, CEO of QIA.
by Ian Young
Source: chemweek.com
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